Home Equity Lines

What is a Home Equity Line of Credit?

We define a home equity credit line as an account set up for you by a bank or lender using your residential real estate as collateral. Obviously the bank is specific using the equity you have in your house as collateral and that is determined by a licensed appraiser. A HELOC loan is similar to a credit card as it is a revolving account for the homeowner to access money. Unlike a fixed rate equity loan, the borrower only pays interest on the portion they have used. In most cases home equity line rates are adjustable and most lenders have extended interest-only options to qualified applicants.

Many people like to compare the home equity line of credit to the equity loan and many people get flustered because they don't know which type of financing is right for them. In simple terms if you know exactly how much you need to borrow now, the fixed home equity loan makes sense. If you are not sure how much you need to borrow or when you actually need it, then the flexible home equity line of credit makes sense because you don't pay interest until you access the funds.

Why the Home Equity Line of Credit Is a Smart Move for Homeowners

Smart homeowners today understand that with a bit of forethought and planning, they can put their homes to work financially for them. It will always be your private refuge from the world, but at the same time you can use it like the asset that it is and receive excellent financial gains from it. A perfect example of this is the home equity line of credit, and when you decide to take advantage of it, you and your family can benefit in a big way.

First, it's worth understanding what the home equity line of credit is. Instead of a traditional loan, this type of lending program offers you a set amount of funds that are put into an account. Then, you can use those funds whenever you wish, however you wish. You aren't charged interest on the overall sum – just on what you've actually used. Essentially, you can think of this line of credit like a credit card – only with better terms.
If you're not convinced, let's look at some of the benefits that the home equity line of credit offers you.

• Interest rates on these lines of credit are very low, primarily because they're backed by your home. Your line of credit is determined by how much equity is in your home, making your 2nd mortgage loan much less risky to lenders.

• Most lenders will set up your home equity line with no costs, no closing costs, and no annual fees. This means that you have a line of credit you can use without all of the higher costs associated with credit cards – but that can be used almost exactly like a credit card would be utilized.

• You only pay interest on the money you use from the credit line. In traditional refinance or equity loans, whatever you borrow immediately begins accruing interest. But with these loans, your interest is only charged on funds you use. That means you can keep your monthly payments lower and save in the long run.

• Peace of Mind - The fact that you have a line of credit you can borrow from and repay as needed means that you give yourself a kind of safety net. This in turn means that you are able to rest easier knowing that you are more financially secure. The key, of course, is to use the line of credit responsibly.

• The home equity line of credit is also tax deductible under current tax codes. This helps you by providing additional incentives over other lines of credit – how many credit cards can you say are tax deductible?

• Find a loan program that approves credit scores in your range. There are still a few non-prime companies that offer bad credit home equity loan programs.

In short, taking out a home equity line of credit is one of the smartest moves that a homeowner can make today. Whether you need the funds for a vacation or just want to set up a kind of emergency fund that is there when you need it, there are few reasons not to consider this type of loan. Compared to other options, it offers a tremendous number of benefits that simply can't be ignored. Shop Second Mortgage Lenders.

Over the last few weeks, several trusted lenders have informed Nationwide that their credit score requirements for many of their home equity line programs have been revised. In many cases borrowers can qualify for a HELOC with less equity than previously stated.

Many lending participants are reporting that in many cases Underwriting approvals are taking up to 24 hours for many of the home equity credit line programs. Find out if HELOCs have the features that would benefit your situations.

Are you expecting online approvals for home equity options in less than 10 minutes? Get help finding Home Equity Lenders that value your time and appreciates your business.

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Home Equity Line Requirements:
Full Documentation Loan

Please gather the following loan conditions ASAP